Take, for instance, my recent retweet about a Bertolli’s ad campaign.  @LowbrowKate tweeted the following.

Marissa Tomei is WAY to good for this: http://intotheheartofitaly.yahoo.com/

I couldn’t agree more.  I have been a fan of Tomei since My Cousin Vinny.  She’s way to good an actress to be shilling frozen Italian food in webisode format.  But look at the rest of the cast and you will see the star of the short lived MTV Sports – none other than Mr. Dan Cortese.  So I added some commentary on my retweet.

RT @lowbrowkate: Marissa Tomei is WAY to good for this: http://bit.ly/aFCSJF | Dan Cortese makes sense, though. He needs the work.

Well last night I got a reply from Mr. Cortese (which has since been removed).  Here’s the screen grab from Tweetdeck.

I couldn’t help but have some fun with Cortese.  My reply back?

@dancortese1 No offense, dude. You were great in Veronica’s Closet.

Where else but social media can a two-bit political hack and a D-list TV star interact so freely?

God bless the Internet.

(For the record, I had to Google Cortese to find something he was in other than MTV Sports. I don’t recall ever having seen Veronica’s Closet.  He has apparently done more stuff recently.  Frankly I am jealous that he got to travel through Italy with Marisa Tomei.  Back in the early 90s, many a guy I know would have traded a left testicle for that opportunity.  Way to go, Dan!)

It will be sold via the Xbox Live Marketplace for about $15.  They hadn’t given out a release date, but yesterday they said March 3rd.  So don’t call me that day, I’ll be shelling some krauts.

It may be interesting to draw that analogy out a bit further.  It occurs to me that your ISP (and most other companies, frankly) are very much like your significant other.  And on a certain level, that has serious implications for consumer satisfaction.

When you are dating, most of your friends will never hear about how great your bf is on a daily basis.  When he screw ups, however, you’ll tell all your friends.  You’ll tell just about anyone who asks.

That’s actually very similar to your ISP.  Typically, most ISPs have tremendously reliable service. When that service fails – on the voice, video, or data side – you’ll tell everyone.  If the repair guy is late or doesn’t show, you’ll tell everyone you were stood up.  If he tracks mud on the floor, you’ll tell everyone he was a slob.  If it isn’t resolved when he leaves, you will tell everyone he left you unsatisfied.

Since everyone has similar experiences, they’ll commiserate, tell you that guy is just no good for you, you deserve better, it’s just a shame that there are no decent guys is no competition in the ISP marketplace.

A week later when you are browsing freely, cuddled up watching TV, or talking to your mom back home, will you mention that they’re taking care of you today? Will you talk about all the great things they do for you? All the great places they take you?  Probably not.

Most of your friends will eventually grow to think your boyfriend is a big douche who’s always running around and never makes you happy.  How many of them have ever heard you say anything good about your ISP?

The fact is, like relationships, telecom can be messy.  You may not always get what you want.  You may feel you just can’t count on them.  You might think you’re putting a lot of yourself your money into the relationship, and they just take you for granted.

But like relationships, we’ll get through this together.  Let’s just get a pint of Ben & Jerry’s, browse the web, or just settle down to watch Sleepless in Seattle OnDemand.

At dinner Tuesday night, I was discussing those points with a bunch of guys I consider to be very bright technologsts. One of the guys at the table argued the iPad isn’t meant to replace a laptop for business use, it is meant as a consumer device – a user friendly extension of yourself, I suppose. I agreed, explaining that the iPad is useless as a mobile office solution because it is limited in applications to what is web based, or what is available at the app store.

I like using Office, I really don’t like OpenOffice/GoogleDocs. I’ve tried them and found them incredibly wanting. Say what you will about Microsoft, they make a hell of an office product. (Don’t get me started on how inferior Entourage is to Outlook, though. That’s another post in itself.)

But here’s the problem, as I explained to them. The iPad isn’t really a good platform for personal use either.

What do you use a personal device for?

A personal device, especially one expected to become the standard for such devices, needs to have a lot of capability for personal media.

The iPad is clearly based on the assumption that everything is in the cloud. That’s not the case for most users, though. Most users still install applications, download mp3s, play DVDs, etc. With only 16GB on the low end device, the amount of space available for any of that media is minimal. Even at 64GB, the iPad is seriously underpowered for storage compared to a 160GB to 250GB netbook – especially at two or three times the price.

Assuming you want to get everything online, you still have the problem of actually achieving that. Since the iPad doesn’t do Flash, you’re going to have problems with a staggering number of websites, especially if they use it for video delivery. Flash is installed on the overwhelming majority of computers. There is rampant talk of HTML5 replacing it, and many big names are looking at implementations to replace Flash, but there are significant hurdles.

George Ou at Digital Society (of which I am a Director), looked at YouTube’s implementation of HTML5 and found it lacking. In addition, you have the issue of battling codecs that has made adoption by browsers inconsistent.

Assuming the iPad only allows Safari, and since Apple has significant concerns with the lack of patents on the Ogg Theora codec, it’s possible that some site video won’t work even with HTML5.

Absent a reliable streaming solution, and without enough storage space to handle stored media, the iPad falls short on the media front.

What is the iPad’s Value Proposition?

The other problem with the iPad is the fact that it is unlikely to function well as a standalone product. The lack of any type of drive prevents the direct install of applications and requires the iPad be connected to something else. So now you have to shell out the $500 to $700 for the iPad, and you still have to have the $300 netbook, or the $1,000 laptop to connect it to. The iPad was billed by Jobs as an intermediary device with the best features of a smartphone and a laptop. However, since it is far too large to hold up to your ear, and way to underpowered to replace the laptop, you have left neither of those behind, and instead spent $600 for a device that does little the other two don’t.

If you will still need a laptop/computer as well as a phone, there is a serious question as to what the iPad gives you that makes it a unique value.

When the iPod came along, most people were still listening to CDs. The value of the iPod was in a) the storage capacity to keep larger amounts of content with you at any time, b) a menu system that made accessing that content quick and easy. While other mp3 players were in the market, the iPod made digital music easily accessible. The best mp3 available offered significantly less as a value proposition.

Similarly, the iPhone put more power in the phone. The Blackberry was the smartest widely-deployed smartphone available at the time of the iPhone’s release. Yet the iPhone rose quickly to dominance because it gave you more power, more capability, and more storage at a similar price point, and in an easier to use package.

The iPad Has None Of That

A few years ago I helped organize an event at which Marc Andreessen spoke. He had requested a white board for an audience participation event. With almost 800 people in the room, that just wasn’t reasonable. So I arranged with a Dell sales rep the use of their first tablet. We connected it to a projector, and turned Andreessen loose.

Midway through his remarks, he started talking about convergence, and the tendency to take things that work perfectly well on their own, and jam them together. He commented that his first cellphone was a brick – big, bulky, heavy. But he had just gotten to a very small, very lightweight phone, and now here come smartphones to make us carry the brick again.

Then he held up the tablet and said, “A paper tablet is cheap, you can get it wet, you can use it in broad daylight… this thing has none of that!”

And that’s the problem with the iPad. It’s not robust enough to be either a business device or a consumer device. It relies on Apple’s closed architecture, has far too little capacity, and limits your ability to consume the media you want as you choose. Further, it has far greater limitations than a netbook, but at a substantially higher price point.

A netbook has similar battery life, but also allows you to add your own software. A netbook has a larger hard drive, and doesn’t require another more expensive computer to run. A netbook costs half, but does twice, as much. Are they perfect, no. Will they get much better over time, yes. But I would still pit even the worst one against the iPad.

The iPad simply doesn’t offer any value compared to what else is on the market. Cheaper, but more powerful netbooks, or slightly more expensive, but far more capable Macbooks offer much more. Even the iPod Touch and iPhone give you most of the same functionality, but with a smaller screen at half the price. There is simply nothing that differentiates this product. And that’s the fundamental problem with the iPad.

The answer is always incredibly simple. For instance, you can just get Netflix, and watch all those episodes of Entourage on DVD – six months or so after they air. You can go to Hulu and watch programs – except for the fact that the overwhelming majority of cable programs are either a) not on Hulu or b) on Hulu months after they air.

Now there is a point to be made here about why they call it pop “culture” and how there is a societal value to watching shows near the air date so you can engage in the social aspects of entertainment. But I’ll leave that point alone.

The really annoying part of these posts is the authors will invariably talk about the ease of getting cable content, then cite as their examples shows which are not cable programs.

The latest of these is TechCrunch. Now, I’m a geek, so I read TechCrunch a lot. Some of their content I’ll quibble with, but most of it is pretty good. This little item, though, is truly stupid.

John Biggs posits that he has come up with a great process for ditching cable:

I’ve been angling to get rid of my TiVo and cable for some time now and I believe I’ve finally figured out a solution that works best for me. It involves a lots scripting, Sabnzbd, and HandbrakeCLI and I’ll tell you what I ultimately did next week once it’s stable but it seems to be working as well as can be expected for these sorts of hacks.

Sure, John, that’s super easy as long as you’re familiar with Usenet, binary newsreaders, and video transcoders. Super easy!

He goes on to explain that the content he’s pulling in is completely illegal:

It consists of two disparate parts. The first is a shady underground that can offer these shows, stripped of commercials, a few minutes after they’ve aired. How they do it is a topic for another story, but needless to say popular shows are available in less than ten minutes after they air on the Eastern Seaboard. It is a testament to the dedication of a few TV lovers that these shows are available, for free, as they happen.

It’s important to understand that unlike mp3s, television content is not easily ripped and not easily portable. Yes, the shady underground may currently be doing this, but the content owners are chasing it down.

But let’s assume all of this is easy, and the illegality won’t make you squirm, and let’s look at the shows John’s actually talking about here.

What I don’t see in that list is actual, cable content. There is a bunch of stuff from the UK, and a whole lot of broadcast content, but where is the cable content? If it’s that easy to ditch cable (and cable companies should be “skeered”) and given there are literally hundreds of cable channels, and only a few broadcast channels, why is a list of available illegal content skewed so heavily to broadcast.

So from the read of this, John Bigg’s has gone out of his way to come up with a way to steal broadcast content through an incredibly complex process that involves “a shady underground”.

So here’s my suggestion for John. If you want to watch TV as it airs (rather than “immediately after”) then go buy yourself an antenna. They’re lovely inventions that let you watch all the broadcast TV you want, and don’t involve scripting, HandBrake, or SABnzbd. If you want an option to timeshift that programming, invest in a Win-TV-HVR-950Q from Hauppage. It has a built in DVR, and picks up NTSC, ATSC, and clear QAM programming (broadcast, in other words). It’s plug and play, so again, no scripting.

So without further ado, I’ll throw out the 26 questions I’d really like to ask, but would be unlikely to actually answer myself.

1. Have you ever been arrested?
2. Were you guilty or innocent and what were the charges?
3. Will you ever drink that much again?
4. How much do you hate your job?
5. How many times per day do you pray for an earthquake just to break up the boredom?
6. How many times per day to you hope for the sweet release that only death will bring?
7. Where did you lose your virginity?
8. How much did it suck?
9. If you could go back in time and give that person pointers, would you?
10. If you could go back in time and not be such a whore (or manwhore), would you?
11. Speaking of sex, how many kids do you have?
12. How many did you have on purpose?
13. How many times have you wished you had that vasectomy you joked about in college?
14. If you could have any celebrity killed, which would it be?
15. Would you make it painful or quick and easy?
16. Would anyone miss Lindsay Lohan?
17. Have you ever done drugs?
18. Are you still in contact with the person who sold/gave them to you?
19. Can I have their number?
20. Do you like Internet porn?
21. Ya, me either. How many times per day do you look at some just to make sure you still don’t?
22. Really? That’s a lot! You’re very thorough in your “research” aren’t you?
23. How many drinks does it take before you make really bad decisions?
24. Want to go out tonight for drinks?
25. How much time have you spent answering Facebook questionnaires/quizzes in a desperate attempt to regain some semblance of a connection with another human being?
26. How’s that working out for you?

Answer these questions then send this to or tag 20 of your closest friends then prepare for them to be terrified by your answers. Be sure to tag me so I’ll be able to keep track of the implosion of your career for my own twisted pleasure.

On Sunday I’ll be speaking on a panel about gaming and advocacy. The purpose of the panel is two-fold.

First, we are looking to teach gamers how to advocate for or against policy issues that impact them. It seems not a week goes by that I don’t see an article about some misguided state legislator who has determined that video games are the root of all evil. They typically then go on to craft legislation that seriously impedes the rights of gamers. We hope gamers will begin to take these issues seriously and organize to become a significant political force.

The second purpose for the panel is to talk a bit about how political groups and causes are using games to convey policy messages. Following the Obama team’s use of paid advertising in an online racing game, the use of such tactics is getting pretty advanced. I, for one, am looking forward to hearing from my fellow panelists as well as the audience on that topic.

If I pick up nuggets of wisdom from the panel, I’ll be sure to pass them along via my blog as well as my Twitter feed. Follow me @MichaelTurk (if you aren’t already.)

Finally, it looks like 11 of my 20 readers have voted in the “How Would Gilligan’s Island Vote?” poll. If you haven’t, I hope you’ll weigh in. I’ll be posting the reply’s over the weekend.

Question 2. Did Apple act alone, or in consultation with AT&T, in deciding to reject the Google Voice application and related applications? If the latter, please describe the communications between Apple and AT&T in connection with the decision to reject Google Voice. Are there any contractual conditions or non-contractual understandings with AT&T that affected Apple’s decision in this matter?
Apple is acting alone and has not consulted with AT&T about whether or not to approve the Google Voice application. No contractual conditions or non-contractual understandings with AT&T have been a factor in Apple’s decision-making process in this matter.

So why was Google Voice rejected? Well… It wasn’t.

Contrary to published reports, Apple has not rejected the Google Voice application, and continues to study it. The application has not been approved because, as submitted for review, it appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voicemail. Apple spent a lot of time and effort developing this distinct and innovative way to seamlessly deliver core functionality of the iPhone. For example, on an iPhone, the “Phone” icon that is always shown at the bottom of the Home Screen launches Apple’s mobile telephone application, providing access to Favorites, Recents, Contacts, a Keypad, and Visual Voicemail. The Google Voice application replaces Apple’s Visual Voicemail by routing calls through a separate Google Voice telephone number that stores any voicemail, preventing voicemail from being stored on the iPhone, i.e., disabling Apple’s Visual Voicemail. Similarly, SMS text messages are managed through the Google hub—replacing the iPhone’s text messaging feature. In addition, the iPhone user’s entire Contacts database is transferred to Google’s servers, and we have yet to obtain any assurances from Google that this data will only be used in appropriate ways. These factors present several new issues and questions to us that we are still pondering at this time. (emphasis mine)

The statement in bold type above would be reason enough not to approve the application in my eyes. If they cannot obtain assurances from Google that the transfer of my contacts to Google servers won’t result in privacy violations, the application doesn’t deserve approval. Period.

There is an interesting discussion of some AT&T requirements that applications can be written to take advantage of wi-fi connections but not AT&T’s mobile network. For instance, AT&T does not allow TV signals to be routed over their 3G network in order to prevent congestion. For that reason, the reply states, Sling Media’s SlingPlayer Mobile was initially rejected and modified by Sling to work only on a wi-fi connection. The letter also states (though I have not verified this) that AT&T’s terms of service state these prohibitons.

So it appears that a) Andy Kessler is still as wrong, b) AT&T had nothing to do with the Google Voice "rejection", c) Google Voice has not actually been rejected, it just hasn’t been approved, and d) Google may have actually made their statement in an effort to bring public pressure to bear against Apple.

There is plenty of evidence that Kessler’s whole premise is wrong. For instance, Google Voice runs on Blackberries on the AT&T network. Apple allows other VoIP applications like Skype to run on the iPhone. There are reports that Apple is developing a product that would compete with Google Voice.

Even if you discount all of that, however, Kessler’s column is full of inaccuracies, faulty assumptions and outright misconceptions of the state of competition in the telecommunications space. These errors fall into four main areas:

• Misunderstanding and misapplication of technology concepts
• Business competition on features versus price
• Network investment and sunk costs
• Cable deregulation

We’ll break these down one by one.

Technology
Kessler’s suggestion for reform of wireless telecommunications is simple – “any device should work on any network.”

While that truly does sound like technology nirvana, unless we agree to one universal standard for every technology, it’s not likely to happen. Why? It’s due to the very thing Kessler claims to want – competition. As Victor Godinez points out in the Dallas Morning News:

Kessler’s insistence that “any device should work on any network” suggests that he doesn’t understand even the basics of cellphone technologies. T-Mobile’s and AT&T’s GSM networks are simply incompatible with Verizon’s and Sprint’s CDMA systems, no matter how much Kessler might think they are. That’s why, even when you unlock an iPhone, you can’t make it run on Verizon’s network.

Kessler makes a similar error when he suggests that ‚”voice is data.” As The Social Telco blog points out:

While there’s a sense in which that’s true – all communication is ultimately ‘data’ – it’s only true in the technical sense if it’s carried that way. Which it isn’t, on today’s cellular networks and most public telephone networks.

Other than where voice over IP is used, voice is circuit-switched, which means it ties up an entire (virtual) circuit from end to end for the duration of a call, making it unavailable for other purposes. Data, on the other hand, is typically packet-switched, meaning that a data ‘connection’ in fact only uses up network bandwidth when packets are actually being sent back and forth, otherwise freeing up that bandwidth for the use of others. As such, voice networks and voice calls use network capacity in a very different way from data, with different equipment required and different economics associated with them.

Wireless networks today are moving toward a new standard called LTE which will do two things. First, it will make Kessler’s assertion that ‘voice is data’ more or less accurate as it does rely on IP for voice traffic. Second, it breaks down the barrier between CDMA and GSM networks. Verizon has suggested they’ll be using LTE by next year. These advances are being brought about by the very competition Kessler claims is thwarting them.

Kessler also suggests that connection speeds to our homes and phones should double every year, and suggests they have not. Here again, Kessler gets it wrong.

We explored exactly this topic on Cable’s blog after Robb Topolski made a similar assertion about broadband speeds and Moore’s Law. The fact is, since the inception of the 300 baud modem in 1978, broadband speed to the home has more than doubled every two years. We have not done a similar comparison for cellular technology since people have used wireless for data for a very short period of time.

Competing on Price or Features
While Kessler spends most of his space clamoring for competition in price, he ignores robust competition on features. It is a glaring omission given the economics of telecommunications.

Telecommunications is an expensive game. Cable companies have spent billions, as have the telephone companies, building out their networks. We have seen estimates that the per-home connection and acquisition cost for one FiOS customer is between $3,000 and $5,000. The same holds true for wireless when you factor in spectrum costs, towers, etc. It will take those companies a very long time to recuperate the sunk costs.

So, how do you compete to get that back if you focus only on competition on price? The answer is that you don’t. You compete on price, if at all, only to gain market share. Once you have a healthy share of the market, you stop competing on price and compete on features.

That competition on features is exactly what the iPhone represents. Ringtones, app stores, and other features are the core of competition when costs are roughly equivalent. Working in cable, we often hear arguments about price. They typically go like this:

Complaint: My cable (and/or broadband) bill is too high.

Reply: Well, then switch to Satelite/DSL

Customer: But they don’t offer (VOD, speed like cable, etc)

Reply: So what you’re really saying is you want all the features that cable offers, but you don’t want to pay for them?

In other words, the choice of which offering to choose comes down to features. There are, people will acknowledge, cheaper options. However, people don’t make decisions solely on price. They make them on perceived value and that includes features. I can get a phone that makes calls, and plays MP3s, and does other things, for less than I’d pay for an iPhone. But I want the perceived value of the iPhone. That’s the value of exclusivity. Do I have to use your network to get the phone I want, yes you do.

If you argue competition solely on price, though, Kessler suggests that AT&T Wireless margins are an ‘embarrassingly high’ 25%. Does that point to a flaw in my argument? Not really. As Hance Haney at Tech Liberation Front points out:

Before we get to that, Kessler complains that margins in AT&T’s cellphone unit are an ‘embarrassingly’ high 25%. He doesn’t point out that AT&T’s combined profit margin – taking into account all products and services – is only 9.66%.

AT&T is actually earning less now than it was legally entitled to earn when fully regulated – 9.66% versus 11.75%.

Haney also points out that those margins are required by government mandate, to subsidize landline service.

In a normal business, an unprofitable product or service would disappear. But telecom providers are still required by law to provide plain old telephone service to anyone who requests it. It’s called the ‘carrier of last resort’ obligation. Believe it or not, providers are still required to provide copper-based, circuit switched phone service in many places, even though they could cut costs by deploying fixed wireless and VoIP to deliver basic phone service.

This service obligation imposes a tax on those of us who have canceled our landline service in favor of our cellphones in the form of artificially high prices for wireless service.

Network Investment and Sunk Costs
Let us pretend for a moment that Kessler’s notions of reform made any kind of sense. He suggests the root evil lies in ‚’own[ing] a pipe between you and your customers,’ and thus we should take pipe ownership away. Except, those pipes are already built and paid for.

The mobile carriers already paid handsomely for the spectrum they use. If the government were to take ownership, then those companies would have to be compensated for the billions they spent. You may recall the ‘open access’ argument from a decade ago that proposed that it would be bad to let companies own their pipes because they could have exclusivity over the data that flows through them. Since the cable industry has invested more than $145 billion over the past 13 years, how should they be compensated? What of AT&T and Verizon’s investment in their networks because they want to compete with cable? Should that all be taken away with no compensation? And if it’s taken away, who can do a better job?

Companies are investing in networks to compete with each other. Is the competition and investment happening fast enough? Arguably not. But it is happening, and that competition is being spurred by exactly the concerns Kessler raises – demand for services, demand for speed, and demand for features.

Cable Deregulation
As we said, most of Kessler’s piece concerns itself with wireless. We have our issues with his facts and arguments there. However, given our employment with the cable industry, where we truly take umbrage at his comments is Kessler’s claim that one of the key elements of a new national data policy would be to “End municipal exclusivity deals for cable companies.”

Fortunately for Kessler, his work has already been done, since this was covered in the 1992 Communications Act. To quote from the section on “Franchising and Regulation”:

“a franchising authority may not grant an exclusive franchise and may not unreasonably refuse to grant an additional competitive franchise.”

Over the last few years, many states have taken that federal mandate a step further and passed laws that took franchise authority away from the cities and placed it at the state level. The FCC went a step further and made sweeping changes to section 621 of the Cable Act and granted a federal franchise authority to further streamline the process.

Conclusion
There’s plenty of irony in Kessler’s piece. He argues for competition, which already exists. He argues against exclusivity and pipe ownership and in favor of “new, feature-rich and productive applications.” But if you can’t own the pipe, who will pay for upgrades? If you can’t have an exclusive offering of a product or service, why invest the money to develop such offerings? How will we get the “faster and faster data connections” that Kessler wants? If you can take away the ownership of infrastructure that is already built, why should investors have any faith in supporting a business affected by such radically sweeping changes?

Focusing on a strong broadband infrastructure is a good thing. Focusing on a national data plan, especially as voice actually does become data, makes sense. However, Kessler’s arguments, based as they are on faulty technical, policy, and business assumptions simply don’t add up to much.

At issue is a column by the Washington Post’s Rob Pegoraro about the recently announced TV Everywhere plan cable companies are pursuing. In his column Rob writes:

Yes, you read that right: To watch this new batch of TV shows online, you’d have to sign up for a traditional pay-TV plan.

The TV Everywhere idea has been a dream of some media people for the last few years; see, for instance, Mark Cuban’s defense of the idea. But I don’t get it. At all.

Well, my immediate thought is, “You’re right. You don’t get it.” But after that, words fail me.

First, Rob, this isn’t “a new batch of TV shows”. This is the content you’re already paying for, but you’re now allowed to view it online. In order to view Pay-TV online, you need to pay for Pay-TV. That’s sort of the whole point.

Pegoraro suggests that this is like requiring people to pay for a subscription to the Washington Post in order to take a college prep test course. Ummm… No. That’s not at all the same thing. TV everywhere is, however, the equivalent of saying, “If you want to eat your McDonald’s Happy Meal in the park, you still have to pay for the McDonald’s happy meal.”

Next, Pegoraro asserts that incredibly complicated things like “authentication” are way to difficult to comprehend or apply:

Set aside such operational issues as authentication (how do you verify that one person’s a Comcast/DirecTV/Fios/etc. customer and another is not?)…

Ummm… How do you know if someone is a Gmail user or not? Well, Rob, they’re called “accounts”. When you subscribe, they create one. They come with something called an “account number” or a “user name” and a “password”. When you want to access your service online, you type (that big flat thing in front of your monitor is called a keyboard) those pieces of information into a form, click “submit” and voila! You are authenticated.

Pegoraro, again:

If somebody wants to watch video online, let ‘em: Charge them a fee, make money off their attention through advertising–better yet, give people a choice between watching ads or paying for an ad-free experience. But don’t force them to sign up for an unrelated, non-Internet service.

Sure, because the “ad-supported” model is working so well for broadcasters and newspapers. Even YouTube (ad supported video) is projected to lose between $175 million and $470 million this year. Even TV advertising is a failing venture because people are skipping the commercials. Hollywood has begun writing the commercials directly into the script to stave off that practice. NBC recently announced that Jay Leno’s show in the fall will be “DVR-proof” to force advertising on the public.

Do such actions seem like the tactics of a business model that works?

So let’s take a business model that works (a hybrid ad/subscriber model) and force it to pursue a failing business model because you want content for free – content that may cost millions per episode to produce.

As for the comment that you are forcing someone “to sign up for an unrelated, non-Internet service”, that’s still ridiculous no matter how many times you repeat it. This isn’t a non-Internet service. It’s the same service you already subscribe to, you just have more ways to consume it now. However, if you want to consume it, you have to subscribe.

Finally, Pegoraro suggests that media companies should simply give up and make all their media available for free:

Repeat after me: Trying to introduce an artificial scarcity of easily-duplicated content on the Internet does not work. If you set up boundaries that make no sense to your customers, you will simply cede the field to bootleg redistribution of your work. Fighting this principle is like trying to push water uphill–with a broom.

Well, actually, Rob. Most cable content isn’t available online for free – even through bootleg. Some of the most popular shows on cable are HGTV’s design programs. I challenege you to go find a readily available bootleg source of them. Go ahead, I’ll wait…

…

…

Back yet? What about ESPN sporting events? They’re all available for free elsewhere, right? No? What about NFL games? Surely the satellite guys give those away for free and you don’t need to subscribe to get the Sunday ticket, right? No? Hmmm… Well what about HBO’s programming. You can get Entourage episodes for free all over the net, right? Really? Only the old ones that have been released for sale well after the air date?

How can that be? How can people control such things? How can they possibly defeat the bootleg distribution of their work? Because they don’t make them available online for free? Perhaps.

The fact is, despite Rob’s characterization of Pay-TV as “easily-duplicated content”, it’s simply not true. Look at YouTube. The most popular video sharing site will disable the soundtrack to your video if the audio patterns in the file match copyrighted content. Sure. You could cruise BitTorrents looking for content. And many do. Those sites are constantly defending against their copyright violations and go out of business regardless of the legitimacy they claim (AllOfMP3.com, anyone?).

You can also find websites that show grainy, handicam captured versions of first-run films – often before they appear in theaters. But the quality sucks. Under Pegoraro’s theory, movie theaters should simply give up the fight and make all movies (regardless of the cost to produce and market them) open to the public at no cost on day one. Better yet, just close all the theaters and let people download the movies for free? Heck, the studio could easily make up those $30 million salaries and production budgets by displaying an ad for mortgage caluclators right along side the film, right?